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Federal Contractors, Subcontractors and Suppliers Beware: Proposed Notice of Employee Unionization Rights Exceeds Expectations

Labor & Employment Update Fred Gants, David B. Kern

The United States Department of Labor ("DOL") recently issued a proposed rule to implement Executive Order 13496, signed by President Obama on January 30, 2009. This Order requires certain government contractors and subcontractors to post notices informing employees of their rights under federal labor laws, including the National Labor Relations Act ("NLRA"). While it was expected that the proposed rule to implement this Order might contain a broad statement of employee rights found in Section 7 of the NLRA1 or a simplified list of employee rights under the NLRA, the proposed rule issued by DOL has surprised many employers in several respects.

Extensive Pro-Union Slant in Detailed Statement of Employee Rights

To the surprise of many, the DOL has taken the position that the statement of employee rights should contain "greater detail of NLRA rights, derived from Board or court decisions implementing such rights - which will more effectively convey such rights to employees." The DOL has included an Appendix A containing a detailed required notice to employees. This required notice begins by stating, "It is the policy of the United States to encourage collective bargaining . . . ." The notice then goes on to list seven rights of employees. Among the rights listed are the right to:

  • Form, join or assist a union.

  • Take action with one or more co-workers to improve working conditions, including attending rallies on non-work time and leafleting on non-work time in non-work areas.

  • Strike and picket, unless the union has agreed to a no-strike clause and subject to certain other limitations . . . .

Only the last listed employee right mentions the right to "choose not to do any of these activities, including joining or remaining a member of a union."

The proposed notice then goes on to list seven actions that are illegal for employers. According to the notice, an employer may not:

  • Prohibit an employee from soliciting for the union during non-work time or distributing union literature during non-work time, in non-work areas.

  • Question an employee about his or her union support or activities.

  • Prohibit an employee from wearing union hats, buttons, t-shirts and pins in the workplace except under special circumstances (for example, where doing so might interfere with patient care).

Only after the seven illegal actions by an employer are listed is there a provision stating, "It is illegal for a union or for the union that represents you in bargaining with your employer to: discriminate or take other adverse action against you based on whether you have joined or support the union."

In short, the listing of employee rights and statements of illegal employer activities are much more expansive and specific than was anticipated when the President issued the Order stating that employees of federal contractors and subcontractors should be notified of their rights under federal labor laws.

Expanded Coverage of Proposed Rule

Even though the Order stated only that contractors, and possibly first-tier subcontractors, must post the notice informing employees of their rights under federal labor laws, the proposed rule states that the provisions requiring the posting of the detailed employee notice must not only be included in a "prime" contract but must also be quoted in all subcontracts or purchase orders related to performance of a covered contract. The proposed rule goes beyond the language of the Executive Order, applying to every level of subcontractor and to all suppliers of materials and non-personal services necessary for the performance of the contract. It also would obligate contractors (or subcontractors) to take action as required by the Secretary of Labor to enforce the provisions down the chain of subcontractors.

Expanded Authority of DOL

Finally, if the contractor does not comply with the posting requirement, the proposed rule gives DOL authority to cancel, terminate or suspend the contract and to debar the contractor from entering into further contracts. This portion of the rule may conflict with the National Labor Relations Board's exclusive jurisdiction to enforce the NLRA, since the NLRA confers upon the Board exclusive power to prevent unfair labor practices.

Employers are given until September 2, 2009 to submit comments on the proposed rule. The full text of the proposed rule can be found at http://edocket.access.gpo.gov/2009/pdf/E9-17577.pdf

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If you have questions or concerns about the pro-union slant of the detailed notice or other aspects of the proposed rule, please contact Fred Gants at 608-283-2618 / fred.gants@quarles.com, David Kern at 414-277-5653 / david.kern@quarles.com or your Quarles & Brady attorney.




1 Section 7 of the NLRA states, "Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other considered activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities . . . ."